Strong start to 2023 positions the Company for another successful year

(All amounts expressed in U.S. Dollars unless otherwise stated)

TORONTO, May 10, 2023 (GLOBE NEWSWIRE) -- Torex Gold Resources Inc. (the “Company” or “Torex”) (TSX: TXG) reports the Company’s financial and operational results for the three months ended March 31, 2023. Senior management of Torex will host a conference call tomorrow morning at 9:00 AM (ET) to discuss the quarterly results.

Jody Kuzenko, President & CEO of Torex, stated:

“The consistent operational and cost performance that investors have come to expect of Torex continued in the first quarter of 2023, placing the Company in an excellent position to deliver on full year operational guidance for a fifth year in a row. During the quarter, the team produced 122,918 ounces of gold at an all-in sustaining cost 1 of $1,079 per ounce, implying an all-in sustaining costs margin 1 of 42%. Our solid production and disciplined cost management, combined with the higher gold price, resulted in adjusted EBITDA 1 of $132.7 million and net cash generation from operating activities of $47.0 million. Per usual course of business for first quarters, cash flow was impacted by tax and royalty payments of $85.9 million.

“Development of the Media Luna Project is tracking to schedule and budget, with the project approximately 24% complete at quarter end. Through the end of March, approximately 34% of project expenditures had been committed, including 22% incurred. As disclosed previously, the Guajes Tunnel has advanced more than four kilometres with breakthrough on track for early Q1 2024, if not before. During the quarter, the contract was finalized for the hybrid battery electric and diesel underground mining fleet, with fabrication dates established and first deliveries anticipated later this year. The level of spending on Media Luna is expected to increase through the remainder of 2023 as surface construction and underground development activities continue to gain momentum.

“In terms of the forward look, production during Q2 and Q3 will be closer to the bottom end of the quarterly run-rate implied by full year guidance. Our mine plan for the next two quarters sees the conclusion of mining in the Guajes pit, a heavy focus on waste stripping in the El Limón pit and draw down of stockpiled material. Given the mine plan, total cash costs and all-in sustaining costs during Q2 and Q3 are expected to be above the upper end of the annual guided range for those quarters only. Production and costs are expected to return to usual levels in Q4, with higher processed grades and the increased level of ore production. Notwithstanding these planned quarter on quarter movements, we are well on track to achieve annual guidance.

“2023 is an important year for Torex and we are off to an excellent start. With $564 million of available liquidity at quarter-end, strong cash flow from ELG, and continued momentum on production and cost management, we are well-positioned to fund the remaining $683 million of capital on the Media Luna Project while delivering on our commitments and generating solid value for shareholders.”

FIRST QUARTER 2023 HIGHLIGHTS

Strong safety performance continues: Exited the quarter with no fatalities and a lost-time injury frequency (“LTIF”) rate of 0.53 per million hours worked on a rolling 12-month basis. There were three lost-time injuries in the quarter at the Media Luna Project, with three contractors suffering hand-related injuries.
Gold production: Delivered gold production of 122,918 ounces (“oz”) for the quarter driven by a record milling rate of 13,073 tonnes per day (“tpd”) and a record mining rate at ELG Underground of 1,738 tpd. This represents a strong start to the year and puts the Company on track to meet annual production guidance of 440,000 to 470,000 ounces.
Gold sold: Sold 118,455 oz of gold at an average realized gold price 1 of $1,899 per oz, contributing to revenue of $228.8 million.
Total cash costs 1 and all-in sustaining costs 1 : Total cash costs of $709 per oz sold and all-in sustaining costs of $1,079 per oz sold. All-in sustaining costs margin 1 of $820 per oz sold, implying an all-in sustaining costs margin 1 of 42%. Cost of sales was $137.4 million or $1,160 per oz sold in the quarter, benefitting from the record milling throughput, partially offset by the appreciation of the Mexican peso. Given the strong cost performance during the quarter, the Company is on track to achieve full year total cash costs guidance of $740 to $780 per oz and all-in sustaining costs guidance of $1,080 to $1,130 per ounce.
Net income and adjusted net earnings 1 : Reported net income of $68.2 million or earnings of $0.79 per share on both a basic and diluted basis. Adjusted net earnings of $50.3 million or $0.59 per share on a basic and $0.58 per share on a diluted basis. Net income includes a net derivative loss of $26.6 million related to gold forward contracts entered into to mitigate downside price risk during the construction of the Media Luna Project.
EBITDA 1 and adjusted EBITDA 1 : Generated EBITDA of $102.5 million and adjusted EBITDA of $132.7 million.
Cash flow generation: Net cash generated from operating activities totalled $47.0 million and $61.9 million before changes in non-cash operating working capital, including income tax and royalty payments of $85.9 million, primarily related to fiscal 2022. Negative free cash flow 1 of $54.0 million net of cash outlays for capital expenditures, lease payments and interest.
Strong financial liquidity: The quarter closed with net cash 1 of $318.4 million, including $321.9 million in cash and $3.5 million of lease obligations, no borrowings on the credit facilities of $250.0 million and letters of credit outstanding of $7.9 million, providing $564.0 million in available liquidity.
Media Luna Project: Media Luna Project expenditures totalled $66.4 million during the quarter, with a remaining project spend of $683.4 million. Expenditures during this period were primarily focused on continued development of the Guajes Tunnel and South Portals, with development of the Guajes Tunnel reaching 3,870 metres and South Portal Lower reaching 1,725 metres by end of the first quarter. As of March 31, 2023, physical progress on the Project was approximately 24%, with detailed engineering, procurement activities underground development, and surface construction advancing. As of March 31, 2023, the Company had commitments in place for $298.9 million of project expenditures (approximately 34% of total budgeted expenditures). The pace of investment is expected to increase into the second half of 2023 and remain relatively consistent through the first half of 2024, before declining as development activities wind down ahead of commercial production, which is anticipated in early-2025. The project continues to track to overall schedule and budget.
Year-end Mineral Reserves & Resources 2 : Drilling success in the ELG Open Pits and ELG Underground resulted in more than 60% of Proven & Probable gold reserves processed in 2022 being replaced. Drilling both north and south of the Balsas River was successful in increasing gold equivalent Measured & Indicated resources by 1,078 koz prior to depletion (+16%) or 567 koz after depletion (+8%). Measured & Indicated resource growth was driven by ELG Underground, Media Luna, and EPO, where an inaugural gold equivalent Indicated resource of 671 koz was declared.

These measures are Non-GAAP Financial Performance Measures or Non-GAAP ratios (collectively, “Non-GAAP Measures”). For a detailed reconciliation of each Non-GAAP Measure to its most directly comparable IFRS financial measure see Tables 2 to 10 of this press release. For additional information on these Non-GAAP Measures, please refer to the Company’s management’s discussion and analysis (“MD&A”) for the three months ended March 31, 2023, dated May 9, 2023. The MD&A, and the Company’s unaudited condensed consolidated interim financial statements for the three months ended March 31, 2023, are available on Torex’s website (www.torexgold.com) and under the Company’s SEDAR profile ( www.sedar.com ).
Mineral Reserve and Mineral Resource estimates for Morelos Complex can be found in Tables 11 and 12 of this press release. Gold equivalent values account for underlying metal prices and metallurgical recoveries used in reserve and resource estimates. For additional information on the Mineral Reserve and Mineral Resource estimates for Morelos Complex, please see the Company’s annual information form for the year ended December 31, 2022, or the Company’s news release titled “Torex Gold Reports Year-end 2022 Reserves & Resources” issued on March 28, 2023, both available on Torex’s website ( www.torexgold.com ) and under the Company’s SEDAR profile ( www.sedar.com ).

Table 1: Operating & Financial Highlights
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